142 Circlewood

Tuscaloosa, AL 35405

$164,900D+

3 bd · 1.0 ba · 1,018 sqft · Built 1943 · SingleFamily · Active · 31 DOM

Cashflow @ list (25.0% down · 7.5%)

• Estimated rent: $1,352/mo
• Mortgage (P&I): −$865
• Tax + insurance: −$153
• HOA: −$0
• Vac / Maint / Mgmt: −$284
• Net cashflow: $50/mo
• Annual: $602/yr
• Cap rate: 6.66%
• Cash-on-cash: 1.30%
• DSCR: 1.06
• 1% rule: 0.82%
• Cash to close: $46,172

Investor read

• This is a 3-bed/1.0-bath single-family listed at $165k.
• At list price, monthly cash flow is $50 ($602/yr) — positive.
• The deal already cash-flows at list — no discount required.
• To meet the 1% rule (rent ≥ 1% of price), the offer needs to be $135k (18.0% below list).
• It's been on market 31 days — a 3% lower offer ($160k) is reasonable based on typical stale-listing flexibility.
• Recommended offer: $135k (18.0% below list) — sets the bar for 1% rule.
• Local home prices are declining (-3.0%/yr); year-one equity from $1k of loan paydown is wiped out by about $5k of value loss. Plan a longer hold.
• Location reads 77/100 on livability (#9 in AL, #2,909 nationally) — a middle-class / working-renter tenant base. Strengths: amenities A+, health & safety A+, cost of living A; Watch: crime F, employment D-.
• Tuscaloosa City (urban): math 19% / reading 40% proficiency, ranked #74 of 129 in AL (top 57%) — low school quality limits family demand, transient renter base, plan for 1-2y turnover.
• Zoned schools: Arcadia Elementary School (math 8% / reading 32%, grade F, #457 of 627 statewide, top 74%, 440 students, 52% FRL); Eastwood Middle School (math 3% / reading 31%, grade F, #201 of 257 statewide, top 79%, 758 students, 78% FRL); Paul W Bryant High School (math 3% / reading 7%, grade F, #276 of 305 statewide, top 95%, 1,042 students, 48% FRL) — zoned schools at 60% FRL track the district average.
• Zoned-school proficiency averages 14% at this address vs 30% district-wide (-16 pts) — the specific schools serving this property underperform the Tuscaloosa City average; the district grade overstates school quality for this exact location.
• Watch-outs: built in 1943 — expect roof / HVAC / electrical / plumbing capex.
• Market conditions: Rents rising fast (+5.4%/yr); 462 active listings in the ZIP; 22 comparable units currently listed for rent nearby; rentals at typical pace (median 23d on market — plan ~3-4 weeks tenant-placement turnaround); 45% of comp listings sitting > 30 days — soft ceiling on asking rent; 622 units permitted in Tuscaloosa County in 2024 (69 in 5+ unit buildings).
• Tuscaloosa County population projected at +26% by 2050 — long-run rental-demand tailwind backs the buy-and-hold thesis.
• Climate carrying-cost: major wind risk, 55% chance of damaging wind over 30y; extreme-heat days projected 7→20/yr by 2055 (HVAC capex compounding) — expect insurance premiums to compound above CPI over the hold.
• Cap rate 6.7% vs local median 3.4% in Tuscaloosa — top-decile yield for the area; either an underpriced asset or a hidden risk that comps aren't pricing in. Stress-test before assuming the spread holds.

Questions for listing agent

• It's been on market 31 days. Have you received any prior offers? Is the seller open to a 18% concession, seller financing, or rate buy-down credit?
• Built in 1943 — when were the roof, HVAC, electrical panel, plumbing, and water heater last replaced?
• Is there a deadline driving the sale (1031 exchange, divorce, estate, relocation)? That informs how much negotiation room exists.
• Crime grade is F in this area — have there been break-ins, vandalism, or insurance claims at this property in the last 3 years? What carrier currently insures it and at what premium?
• The area grade is low — what's the realistic commute time and amenity access for the typical tenant pool here? Any planned neighborhood developments (good or bad) we should know about?
• What's the average days-on-market for RENTAL listings here right now (not sales)? A rising rental-DOM trend means longer vacancies and softer asking-rent achievability than the comps imply.
• What's the recent tenant-quality profile in this submarket — average credit score on applications, eviction rate, late-payment / NSF rate, and stable-employment percentage? A property-management company in the area should have these aggregated.
• How much new for-sale + rental construction is in the pipeline within 1–3 miles? Heavy new supply typically softens prices + rents 12–24 months out; constrained supply supports both.